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Google Fiber to buy iProvo network, upgrade Utah city to 1 Gbps

Google (Nasdaq: GOOG) on Wednesday named Provo, Utah as the third market where it will deliver its 1 Gbps fiber to the home (FTTH) service where it will take on incumbent telco CenturyLink (NYSE: CTL).

Unlike its network plans in Austin and Kansas City it is taking a different approach to the Provo, Utah deployment by purchasing the city's existing iProvo fiber network.

Although the deal still needs city council approval, Google said that it would upgrade the existing network to 1 Gbps technology and complete network construction so all homes in the city can get access to the service. In addition to the 1 Gbps service, it would offer a free 5 Mbps service to the 115,000 residents on the existing Provo network who pay a $30 activation fee.

City council members are scheduled to vote on the deal next Tuesday, April 23.

Kevin Lo, general manager, Google Fiber, said in a blog post that they "intend to begin the network upgrades as soon as the closing conditions are satisfied and the deal is closed."

Google said that if the deal closes, it hopes to have service up and running by late 2013, meaning Provo would be the second city besides Kansas City where it offers the service. Amidst great fanfare, Google Fiber announced earlier this month that it would bring its service to Austin, Texas where it would compete against AT&T (NYSE: T) and Time Warner Cable (NYSE: TWC). In Austin, Google won't begin offering services until 2014.

Hours after Google made its Austin announcement, AT&T said that it too would build a 1 Gbps service, but it did not specify a timeline of when it would actually deliver it to the city.

What's different about the latest proposal in Provo is that Google is purchasing another service provider, whereas in the other markets it's building its network from scratch.

In Provo, Google Fiber will compete with area cable operator Comcast (Nasdaq: CMCSA) and incumbent telco CenturyLink, which currently don't provide speeds anywhere near 1 Gpbs.

Comcast currently provides up to 105 Mbps speeds on its existing HFC-based DOCSIS cable systems, while CenturyLink offers a mix of ADSL2+ and VDSL2 services on its hybrid hybrid copper/fiber fiber to the node (FTTN) network.

CenturyLink, which entered Provo, Utah in 2011 when it purchased Qwest, currently offers speeds from 1.5 Mbps to 40 Mbps depending on how far away a customer resides from the nearest remote terminal or central office. In addition to providing much lower speeds, CenturyLink caps its lower speed 1.5 Mbps users at 150 GB a month and 250 GB for its higher speed subscribers.

What's significant about Google's presence in Provo for the incumbent players like CenturyLink, which along with Comcast have enjoyed a duopoly for decades, will soon face a competitor that has plenty of financial backing.